Economic Effects Of Economic Inequality

901 Words4 Pages
Economic inequality is a crisis that has been a huge issue throughout the world. People practice inequality in several areas, for example in the areas of education, health and the distribution of power. The distribution of leisure time between men and women is not equal when the requirements of both paid and unpaid work are taken into account. Equality is also measured between individuals, families, social groups (eg ethnic origin, gender, etc..) and between countries. In determining the types of inequality, herefore, the concept of equality must be linked to living and results as well as opportunities and procedures. If we focus on equality of living, different treatment may be required for different persons or groups.
Since 2013, when Thomas
…show more content…
But inequality is still not clearly defined, its effects are very variable, and its causes are hotly debated. It is almost impossible to answer even the fundamental question: What is the unacceptable weight of inequality? There is no "natural rate of inequality" that distinguishes an economy in equilibrium, a level that policymakers can aim at. Instead, the rates of inequality between countries - the narrow approach that ignores everything from broader economic trends - are measured by the impact of differences in wealth disparities on populations in different social settings. These policies have led to higher asset prices - especially bonds and equities - held by wealthy households to a large extent. At the same time, they hurt middle-class savers, who usually rely on traditional savings tools such as bank deposits. With the zero or later interest rate, negative interest rates, these savings have lost their assets as a result. Although average households…show more content…
This is because people 's standard of living depends on the amount of goods and services they consume, rather than the number of dollars they earn. Consumption is also believed to have a diminishing marginal benefit, meaning that the poorer person will assess the extra unit of consumption more than its richer counterpart. Thus, the spread of consumption equally will increase overall cumulative well-being. Inequality in consumption must theoretically track income closely, and although the evidence is not conclusive, recent research suggests that the two have risen side by side in the last 30 years. The measure of wealth is also an important measure as long as wealth can be inherited, unlike income. As wealth inequality increases, the share of births is increasingly becoming an important determinant of living standards. As a result, a society that wants to ensure an equal level of opportunity, where outcomes are not strongly associated with titles, will strive to keep wealth inequality at low and acceptable

More about Economic Effects Of Economic Inequality

Open Document